USD/JPY – Fibonacci says: Trend is down!

Dollar-Yen stopped with astonishing accuracy at Fibonacci 61.8% at 87.50, as yesterday’s high was 87.51! Stopping at Fibonacci resistance levels indicates that the trend is still down. This makes us expect that the whole up-move from 84.81 is only a correction, that will ends once we break the rising trend channel, and then the downtrend will come back to search for new lows. Fibonacci 61.8% at 87.50 is still the most important resistance, and if price succeeds in breaking it, then a test of the bottom of the supposed wedge formation at 88.28 is to be expected, and if this important resistance is also broken, the next target will be the top of that formation which is currently at 88.72. today’s support is yesterday’s 86.84, and breaking it would mean a continuation of the downtrend after some rising bounces. That would target the bottom of the rising trend channel from last week’s bottom on the hourly chart, which is currently at 85.84, and if broken we will test 84.81. Fibonacci says the trend is down, and the Yen strength is still expected, but we should be aware of the possibility of interventions by the Japanese government that would left this pair many steps up!

Support:
• 86.84: short-term support.
• 85.84: the bottom of the rising trend channel from last weeks bottom.
• 86.44: last week’s low.

Resistance:
• 87.50: Fibonacci 61.8% short-term (for the move from 89.17 to 84.81).
• 88.28: the bottom of the supposed wedge formation.
• 88.72: the top of the supposed wedge formation.